Dell purgatory

Yes, Dell’s profit rose in a snapshot but the clouds are gray:

…However, the double-digit growth rate does not portend a return to high growth for the company, the world’s largest seller of PC’s. … The conservative forecast for revenue growth dimmed analysts’ enthusiasm. “It was really a mixed bag,” said William Shope, an analyst with J. P. Morgan. “Impressive revenue growth came with a degradation of margins.” Dell’s gross profit margin was 17.8 percent, the lowest since 2002, said Mr. Shope. “The slowing growth and deteriorating margins could mean that 2006 will be a more challenging year than 2005 was,” said Brent Bracelin, an analyst with Pacific Crest Securities in Portland, Ore.

You can grow too big. And being the biggest isn’t the only way to make money. Sometimes, being the best still is.

  • L Ron Hubbub

    Oh good, another “Dell Sucks, Mac Rules” circle jerk.

  • Ditto that, L Ron.

    Apple is now part of identity politics for a certain demographic.

    Dell is their Wal-Mart.

  • Why can’t we live in a world of Dells and Macs? I feel for Jeff’s past tribulations with Dell, but I’ve got to say, outside of a few minor complaints that I would have known about had I researched a bit better (my 2nd generation XPS is noisy as hell), I’ve never had an issue, and I’ve owned three Dells.

    That said, I am in the market for a new laptop, and I am pretty keen on giving Apple a shot. Okay, maybe it’s a status thing; but what’s so wrong with status if the product works well?

  • L Ron Hubbub

    Robert I ride herd on about 100 PCs where I work. I’ve been purchasing from Dell for my entire eight years here. I wouldn’t say nary a complaint, but considering the volume of machines that pass through here and get hard use they get from active high schoolers, I’m satisfied.

  • David

    I gotta call BS on this false Dell/Apple dichotomy you keep returning to. There are plenty of other high quality manufacturers of Windows laptops out there. Face it Jeff, you’re an outlier point on the Dell CS experience graph. If what happend with your laptop happened to me I would call Amex and dispute the charge and mail the thing back; then I’d move on and not keep reading my own personal issues into each movement of their stock price.

  • As long as we’re myth busting:

    Almost 3 out of 4 times the company with the biggest market share is not the leader in return on assets or return on equity. (from a study of 3,000 public companies across 240 sectors.)

    Big is a bad bet.

  • Arnie Diamond

    I’m with Jeff. I have an Inspiron 600 that permanently sits on a desk in my den. Opened it one day and there is a blotchy triangle in the lower right hand corner. I paid for a 3-year extended warranty. Bottom line-after fighting with them (and their oursourced robots for a month) they refuse to honor the warranty and repair the LCD. They say the blotch was caused by acccidental damage even though the laptop has never been moved.

    I’ve convinced many friends to buy a Dell, especially because of their warranty. Now I am a “Don’t Buy Dell” advocate!

  • Don’t buy a Dell.

    Don’t shop at Walmart.

    Pay 40% more for organics at Whole Foods.

    Drink $5 lattes from Starbucks.

    Pay up for a morally superior hybrid car.

    And then assert that the other side is the bastion of the “rich”.

  • Nut… Very amusing… I’m not talking about brand, though. All I’m saying it that my Apple works better than my Dell did… or my Viao…. or my coworkers Toshibas…..

  • Jeff,

    For the sake of argument, I will temporarily agree with you that Apple has superior products.

    A Mercedes surely runs better than a Ford so why not pen a blog touting the Benz and lambasting Explorers?

    I just think you too glibly ignore cost.

    I was recently at a dinner party with three pathetically typical Bostonian couples.

    All of them effectively called me an a**hole for driving an SUV.

    All of them proclaimed their morally superior consumption of organics. (Do the math, organic milk alone will cost a family $700-$1000 more per year.)

    All of them have inherited substantial money and now work in the “goverment” economy or are either teachers or lifetime grad students.

    And shocker of shockers, they all have iMacs and iPods.

    I am prone to an “amusing” post, but remember truth does father a great deal of humor.

    Of all the possible truncations of my name you had to go with “Nut”?

    I guess I invited that when I named myself.

  • I’ve always found it amusing that Apple claims to be “for the rest of us” when they’ve continously maintained the highest premiums for their products.

  • Time, at least mine, is certainly worth money. As someone who works with a PC (HP) and a Mac, I spend less time maintaining a Mac. Macs have always lasted longer for me as well. I’m into my third year on a Titanium Powerbook.

    Apple provides better value. Dell is cheaper. Apple innovates. Dell produces.

    Both have their points and their faults. I’d rather stand behind the innovator.

  • james


    Are you sure they were calling you that because of your SUV?

  • Pingback: g-WH!Z » Apple’s Still Best()

  • sam glasser

    CaptiousNut: This may be off point, but I feel warrants a response: For the record, a Mercedes does NOT “surely run better” than a Ford! For the last couple of years, Mercedes has had its share of serious quality problems. I’m really tired of the Toyota-Mercedes-Can-Do-No-Wrong school of thought. As you might surmise, I’ve driven Fords for quite a number of years — with relatively little serious downtime over 300,000 cumulative miles.

  • Scott

    First, Apple is not necessarily better, just different. I happen to think that the PC of any brand is a better value simply because 1.) the huge number of apps that are available, many free and 2) the price. If I can get a machine that will do a hundred things well, or a machine that does ten things very well, which do I choose? Assume that the price of the one-hundred machine is less than half the price of the ten-machine, and I’ll take the hundred one everytime. Dell? A pc is a pc. For the most part the innards are interchangeable(unlike a Mac/Apple). But I speak of desktops, I’ve never liked laptops, or needed one.
    Now, to the Mercedes “surely run better” debate, I personally own a quietly rusting ’93 Chevrolet Cavalier with 164,000 miles on it – and I’ve never changed a muffler. It’s a sentimental thing, now. I have to keep it. It’s kind of irrational, like the “love” people have for an Apple over a PC. No?

  • Tracy Johnson

    Dell still has no commitment to customer service.

    Here is my own personal story…

    I write to add my story. I own an Inspiron 9100.

    My problems started with an intermittent POST problem. When I tried to start the computer, the lock lights would flash once and nothing more would happen. I called technical support, attempted to explain the intermittent nature of the problem, and explained my belief that the motherboard temperature sensor was failing. Thankfully, the unit was still under warranty, so Dell authorized a return. I sent it to them, they claimed to fix it, then sent it back. However, the unit continued to fail intermittently. So, I called again.

    I learned that the depot hadn’t done anything to the computer even though I had taken the time to include a written summary of the failure mode and my speculation as to the cause. So, off to the depot again. This time, Dell replaced the video card. The unit still didn’t work. On my third call to tech support, I was instructed to flash update the BIOS with a download from Dell’s FTP site. This seemed to resolve the problem. (I now wonder if this was some sort of work around.)

    Shortly thereafter, the AC adapter seemed to fail. I called Dell to order a replacement. I was told that Dell did not carry the AC adapter in stock anymore and that a request to order the part would need to be initiated. Eventually, Dell shipped me a refurbished AC adapter at no cost and with no warranty.

    Three weeks ago, the computer started telling me that it was unable to identify the AC adapter.

    Then, last week, the computer ceased to POST even with the AC adapter plugged in. When the adapter was initially plugged into the computer, the light on the adapter would show green. Shortly after plugging the adapter in, the light would begin to dim and eventually go out.

    Assuming that the problem lay with the adapter and/or the batteries, I decided to order replacements. I first attempted to purchase the replacements on line. However, when I searched for the parts, Dell’s online catalog instructed me to call sales (a bad sign). I called and asked to buy the battery and adapter. The sales person gladly accepted my $230 order and assured me that the correct parts were identified in his system and would soon be on the way.

    Today, the parts arrived. Unfortunately, I was sold a battery for a 9200 and an adapter for an 8500. I immediately called Dell and, after pressing four buttons, was connected to India.

    I explained my problems to the tech support person. He told me that I had been sold the wrong parts (no kidding) and that I would have to call sales to get the correct parts. I told him that I had called sales. I also expressed concern that the problem really resides in the motherboard. Of course, we can’t troubleshoot the computer without powering it up and he can’t authorize a repair call until we first go through the telephone diagnostics. Yes, I had purchased the two years on site service when it was offered near the expiration of my initial one year warranty. Eventually, he looked up the part numbers and initiated a call record. After looking up the parts, he told me that he had to connect me to customer service to place the order for the right parts.

    After a lengthy wait, I was transferred to the Philippines. The customer service rep wanted to immediately arrange for the recovery of the incorrectly shipped parts. I asked him if he would be able to place the order for the correct parts. “No,” came the response. I would have to speak to yet a third person to place the order for the correct parts. Unwilling to arrange for a return until I could confirm my access to the correct parts, I insisted to speak to sales. Another wait. Now I was transferred to Texas.

    I again asked to purchase the battery and adapter for the 9100. This time, the sales rep told me that he could sell me the battery, but that he could not order the adapter. Getting somewhat frustrated, I asked if there was one person at Dell that I could talk to who could resolve my issues. “No,” came the response. I would have to talk to sales to order the battery, customer support arrange the return of the parts that Dell had incorrectly sold to me, and to tech (again!) about the adapter which he suggested could only be obtained from reworked returned adapters.


    Two calls and three different Dell representatives later….this is the best that Dell could do.

    A refurbished adapter is being sent to me. I don’t know when it will be sent (they are estimating March 1). There is no guaranty that it is the right adapter or that it will work (or for how long it will work).


    Dell, if this is what you do for your customers with on site warranty coverage…..well, I can’t even finish the thought.

    Sadly, I note that Dell recently reported favorable financial results. So, I guess cheap products (and I don’t mean price) and non-existent customer service yields profits in the short term. Beware that your name becomes mud in the marketplace. Your short term strategy will not work for long!

    Service Tag

  • My boss bought a Mac and raves about it…….
    I work for Dell

  • MY LETTER TO DELL or I’m sure I’ll never buy another

    First of all, let me say that I am a writer, a professor and someone who uses her computer incessantly. Having a working relationship with a company and having good quality and accurate service are extremely important to most of us but particularly so to a writer who uses a computer more waking than sleeping hours.

    I have been a Dell computer user for over ten years, and bought Dells in the beginning because early on, you had excellent customer service and always attended to personal computing problems for your customers. Many times did I have someone come to my house and fix my computer or was easily able to reach a real person who efficiently helped me and handled my computer issues to my satisfaction. I am sad to say this is no longer the case. I have recently received both extremely poor customer service and worse: when I sent my computer in to be fixed, the problem was both not fixed and sent back with an additional issue. I am refusing to pay the $434 I was charged and also will not purchase a Dell in the future.

    Let me explain. On February 14th, I contacted Dell by phone to explain the problem I was having with my computer. The problem: my computer was not going on AC power and would only work on battery. Since the jiggling of my power cord had resulted in the computer working a bit, I had a hunch that might be the problem but realized it could also be something internal. In my efforts to get an answer to my problem, I was transferred to 6 different customer service reps, each with over 10 minutes of wait time, and each taking all the exact information I had given to the rep before – a bad business practice at best – and by the time I got to the Out of Warranty Department (hardly a friendly way to deal with long time Dell customers who have managed to keep their computers past the 3 year warranty readily purchased – it was more than 1 and ½ hours spent with Dell.

    I was given a case number and told, at the time, that my problem was either a motherboard or the power cord. I was charged the full amount and also told that if the problem was found not to be the motherboard, my money for that part would be refunded. I was told to take out my hard drive and my battery for the packing of my computer, which I did. I trusted your service rep to get the information correct and so did not take the time to write a long letter like I am now doing to explain. Luckily my computer people at the college where I work loaned me a computer and backed up my hard drive since I was also told it would take 5-6 business days to fix my computer – a far cry from the friendly face who appeared the next day, many years ago and took care of any problem with a customer’s approval after it was fixed!

    My computer was returned speedily and I’ve enclosed the form which was returned to me as well as the bill which also arrived speedily. When I tested my computer, the problem was still there and my battery now at only 30%. Naturally, that made me upset since I had already been charged! The same power cord was returned to me.

    Luckily, I called Geek Squad. They diagnosed and replaced my cord with a universal power source (for $100 – which I happily paid since they fixed the problem) and my computer was back in business. Except for one new problem. When I got home, I found that in taking apart my computer, Dell had inadvertently caused my disc drive not to work! The floppy disc drive which came with my computer was (and is) still not working – and I have many of my files backed up on floppies from years and years of work. All not useable until I fix this.

    No, I will not risk having my computer further damaged by sending it back again to Dell to have that problem corrected. Your company has made too many mistakes this time and I just don’t trust the service any more. Your phone diagnosis and literal technical work was both inaccurate. I am sorry but you’ve lost a loyal customer who always talked up Dell with fellow writers and always ordered Dell computers because of my previous history of being taken care of with care.

    Of course, I now realize that you give the poorest and most expensive service to those customers whose warranties have expired. That, in itself is also not a way to endear yourself to loyal Dell users. It would be nice to hear from you that you take responsibility for these errors and willfully see that I was inconvenienced and mis-charged. It would be respectful to get a personal letter of reply, but that may be more than Dell is capable of in this day and age.


    Former Dell supporter

  • Kip

    First…Dell is awful period. I allege they only get good ratings from PCMAG due to the enormous amount of money they spend on advertising with PCMAG. Other more respectable sources like consumer reports rate them much lower especially in areas like support. Working in IT…being forced to work with Dell I have horrible experience with most of their models. I have an XPS 600 and it is the most expensive piece of trash I will ever own. Upon arrival the hard disk was incorrectly configured and had major problems as a result. Due to the financing contract (only major vendor that charges for returns…you can guess why?) I had to stick it out rather then cut our losses and run. Don’t get me started about how unethical their sales people are about trapping you into financing..the represenative we had outright lied on the discounts we would get using Dell financing. My guess to improve his sales commision. He lied period. Okay back to the 10 problems.

    1. Loud fan
    2. Tons of bloatware aka awful software that is hard to remove and conflicts with what you really want to run.
    3. Incorrect configuration of hard drive
    4. Unexplained blue screens of death
    5. Badly configued Bios
    6. Unresolved problems with Nvidia drivers and configuration
    7. Plastic case with cheap plastic cdrom draw cover that will generally break immediately.
    8. In my experience Dell management does not care when you escalate I have tried.
    9. Missing critical system restore disks
    10. Lousy support- Support could not fix one single problem I had. In my many calls to Dell I have only spoken with Indian engineers. These engineers make India look bad period. If they were American I would say the exact same thing. How Dell managed to find all the bad apples in support I spoke with still amazes me…there is talent in all nations/races…Dell in my experience does not know how to find talent anywhere. This is not a dig against India by any means…India has good engineers. This is a statement that Dell support has frustrated the hell out of a lot of people.


    The Dell XPS 600 is supposed to be the top of the line. It was supposed to be different..yet it’s the same old junk with a new pretty logo…increased speed.. well sort of it certaintly crashes faster with that newer hardware. Don’t buy the hype…the only thing Dell does well is marketing bottom barrel hardware. These are my opinions.

  • Ya want great service?

    Ya gotta pay for great service!

    My Dell is covered by Gold Technical Support, and it was well worth the extra money!

  • neeraj

    I wanted to buy Dell because vendors of equipment that the computer had to control recommnded Dell. From Dell India I could not get a propoer quote after more than 15 calls, quite a few emails, three months of total time being bounced around all over their sales team. Finally, I had to buy IBM. Not a good choice, but they were atleast willing to sell.

  • Matt

    Jean:First of all, let me say that I am a writer, a professor and…

    When I was in school, my professor would have immediately failed any paper beginning with “First of all… ”

    I don’t mean to be the grammar police but when you credential yourself as both a writer AND a professor, you probably should attempt to follow good writing principles.

    As for the topic at hand, I have 3 PCs (1 Pentium, 1 Celeron, 1 AMD) Running XP, Linux (FC4 soon to be FC5) and Windows Server 2003. I also have an iBook which I absolutely love.

    Truthfully, your choice of operating system and / or computer should be determined by what you intend to do with the machine. Are you in a high school lab where similarity and simplicity will greatly help you keep computers in front of kids? Buy Dells. In a graphic arts or publishing environment? Buy a G4 and don’t look back. In a general purpose small office? Buy whatever fits in your budget. Want all your friends to think you are a pompous jerk? Buy _____ and tell them all they are stupid if they don’t buy one.

    Don’t bother grading my post… it’s a C at best. :)

  • Ken Spalding

    Having read many negative comments online about the ordeal of placing an order with Dell for a PC, I was not shocked when I realized I am unable to even navigate and negotiate Dell’s online ordering process! It seems each time I try to set up an order, at some point in the process I am whisked to a different Web page and have to retrace my previous steps.

    Moreover, I am disgusted and frustrated with a company that purports to be reputable, yet is too cheap to include a free mouse, keyboard, or printer cable with an order for a new PC package! What’s going on here?

    At a distance, Dell’s “order-by-mail” process always seemed to me a bit customer-risky. But now having personally experienced an inability to even PLACE an online order, I will continue to shop the Best Buys and Circuit Citys in my corner of the world. And I don’t feel up to speaking to a disembodied voice in telephone “sales.”

    I think there’s something to be said for doing this in person, on-site, confident that the computer and peripherals I place in my car will at least approximate what I want. And shipping costs, “free” or otherwise, are not an issue!

    — Ken in Northern Virginia